Bitcoin Bottoms Forming? Analyst Says Don’t Miss The Chance To Buy

Bitcoin has been on a wild rise in recent months. After hitting an all-time high of $73,800, the volatile cryptocurrency has since fallen more than 20% to around $59,675. but, many analysts Think of this as a potential buying opportunity rather than a reason to panic.according to the study Several on-chain indicators from cryptocurrency exchange Bitfinex are flashing signals that historically coincide with Bitcoin’s bottom.

Bitcoin historical trends and returns

The MVRV ratio, which measures BTC’s market value compared to its realized value, has fallen to 2.21 as of last Friday after peaking earlier this year. Historically, readings below 1.0 have indicated a bottom, while values ​​above 3.5 may indicate a market top. Current levels suggest that Bitcoin may be undervalued.

Additionally, BTC has historically seen an average return of 67% going forward when MVRV falls below its 90-day average of 2.44, as it currently does. The stars seem to be aligning for an attractive entry point.
The open interest weighted funding interest rate, which recently turned from negative to positive territory, is also supporting the market. This shows that traders are willing to pay a premium to go long Bitcoin, suggesting bullish sentiment is growing.

Bitfinex points out that the decline in profits due to the quadrennial “halving” event, in which new Bitcoin issuance is halved, could be a headwind going forward as the impact will be smaller in mature markets. are doing. Still, with Bitcoin currently retesting lows around $59,000, this could be one of the last opportunities for investors to buy before the next big uptrend takes hold. From a statistical point of view, the more times a support level is tested, the weaker it becomes and eventually breaks.

A decisive move above the $71,000 high could legitimize the bulls and attract new significant buying interest. Conversely, a break below $59,000 could cause momentum builders to lose confidence and trigger further declines. Indicators suggest that current risk/reward is favorable for increasing exposure. However, Bitcoin has a tendency to earn profits in dime increments. Investors may want to keep the powder dry in case an eventual capitulation shakes out the remaining weak hands before the real rally begins.

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